SNL Kagan Releases High-Def DVD Study

MONTEREY, October 10:
High-definition DVDs are expected to be a significant part of the
home-entertainment market in the next decade, with revenues rising from 3.5
percent of the total market this year to 76.5 percent in 2016.

Meanwhile, total DVD
rental revenue is soaring, according to State of Home Video 2007, up 10.3 percent to $7.4 billion in 2005.
Traditional brick-and-mortar rental revenue also grew to nearly $6.2 billion,
while subscription service revenue was up 50.2 percent to more than $1.2
billion. VHS rental revenue plummeted to 74 percent in 2006, to just $280
million from $1.1 billion in 2005.

“VHS is done for the most
part—studios aren’t shipping any new titles on VHS,” said Wade Holden, senior analyst for SNL Kagan.
“We’re projecting the rental VHS market will be done by 2009, and the
sell-through VHS market will be done by 2010. Video
stores will just hold onto their stock to get the most out of it. You’ll see
$3.00 bargain bins with VHS cassettes hanging around for a while, but it’s
pretty much a done market. No one is thinking about VHS—everyone is
thinking ahead towards high definition.”